According to one analyst's checks with Apple's Asian suppliers, the company is in the process of building a 'Smart TV' prototype as part of an ongoing effort to assert a stronger presence in consumers' living rooms.

In a note sent to investors on Friday, analyst Katy Huberty of Morgan Stanley wrote that the firm's "checks in Asia suggest Apple is working on a Smart TV prototype." Though further details remained scarce, Huberty speculated that an Apple Smart TV could be an opportunity for the Cupertino, Calif., company to consolidate "TV/Video content, gaming, DVR, as well as other features like apps and FaceTime into one product," much like the company did with its strategy for the iPad.

Huberty sees Apple's rumored Smart TV as "potentially the next new product category" and predicts that an Apple-branded TV could add approximately $4 billion per 1 percent share of the TV market captured by 2013.

The analyst also cited three other under-appreciated growth catalysts for Apple in her note: sales growth in Asia Pacific, especially China; expansion of iPhone price points leading to increased smartphone market share and continued dominance of the fast growing tablet market.

Huberty predicts an LTE iPhone from Apple in 2012, with Apple marketing older 3G iPhone models to developing markets. According to the analyst, new features and faster performance of an LTE iPhone could preserve the device's $600 price point, while 3G iPhones would sell for a lower average selling price in countries like China, India and Brazil.

With the international launch of the iPad 2 set to begin on Friday, Apple's lead in the global tablet market is expected to widen. Huberty's long-term view of the device projects adoption rates similar to the iPod. Citing weak sales of non-Apple tablets in the first quarter of 2011 and mixed reviews for upcoming devices, Huberty predicts Apple will easily maintain "well north of 50%" of the tablet market.

Huberty maintains a price target of $410 for Apple stock by November 2011. In a bull case scenario, the analyst sees shares of Apple possibly reaching as high as $540, assuming 55 percent iPhone growth and 74 percent iPad growth. According to the analyst, a bear case scenario could see Apple stock drop to $270 due to the possibility of lower margins and concerns over CEO Steve Jobs' health.

Regarding rumors of a Smart TV from Apple, Huberty is not alone in her prediction. Analyst Gene Munster of investment bank Piper Jaffray has long held the belief that Apple will release a connected television in the near future.

"While Apple's commitment to the living room remains a 'hobby,' we continue to believe the company will enter the TV market with a full focus, as an all-in-one Apple television could move the needle when connected TVs proliferate," Munster said in a note to investors earlier this year. Munster sees a rumored $3.9 billion supply investment for display components by Apple as a possible indication of an upcoming connected TV.

Though Munster does not see an Apple-branded TV coming in 2011, he predicts that Apple could sell 1.4 million units in 2012, adding as much as $2.5 billion in revenue to the company's top line.

I think Apple needs to buy Comcast. The Cisco RNG-100 box and software is worse than Windows 95. It's actually on par with Windows 3. Apple needs to quit dabbling its toes in the water, and get serious about the living room.

To present and future trolls out there and just so that in 5 years time we are clear about this, yes, we are well aware that the TV existed before Apple TV, just as did mobile phones, portable music players and tablet computers. \

So are we talking about an actual television here? Like a Cinema Display - but bigger - with an Apple TV built in?

I thought the consensus was that there isn't enough margin in TV's to make it something Apple would do... or is the idea to sell the screen low margin like other TV's and then profit from the extra iTunes movie/TV sales?

So are we talking about an actual television here? Like a Cinema Display - but bigger - with an Apple TV built in?

I thought the consensus was that there isn't enough margin in TV's to make it something Apple would do... or is the idea to sell the screen low margin like other TV's and then profit from the extra iTunes movie/TV sales?

I guess that in the final analysis, it's a matter of affordable hardware and unbeatable services, the ecosystem. Can Apple be successful there? Guess I know why I am just a spectator! \

Sounds like more fallacies to increase the stock price.
Perhaps it is because I am not an analyst but I do not see how an Apple branded TV could see ever the light of day. Seriously, it is getting old.

The Apple TV is the right strategy for the living room as it works with existing TV sets and serves the intended purpose: to enable the consumption of iTunes content. They can definitely improve on it (2 thumbs up for adding Netflix support but what about Apple TV Apps?) but it cannot be a better product if it were simply integrated with the TV panel.

Let's remember that Apple entered the smartphone and tablet markets because their offerings were disruptive. They were groundbreaking innovations. The Apple TV in its current form is not a game changer and only proved to be a success after a significant price reduction. That says a lot: consumers are not interested to spend a lot of money to get iTunes content on their TV sets.

Unless these highly paid analysts have something insightful that they are not sharing, an Apple branded TV is not a good idea. Apple is better off focusing on its core competencies.

So are we talking about an actual television here? Like a Cinema Display - but bigger - with an Apple TV built in?

I thought the consensus was that there isn't enough margin in TV's to make it something Apple would do... or is the idea to sell the screen low margin like other TV's and then profit from the extra iTunes movie/TV sales?

That's certainly my feeling. And, of course, assorted "analysts" have predicted all kinds of products from Apple over the years that never shipped.

I would love an Apple TV that was price and performance competitive and included some additional functionality, like AirPlay. I just can't see where Apple can do that, however. Samsung are using their own panels and pricing their sets accordingly; by the time Apple assembles the components and puts in some Apple-ness they're obliged to sell a 40" screen for $2,000, which is a non-starter.

They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.

That's certainly my feeling. And, of course, assorted "analysts" have predicted all kinds of products from Apple over the years that never shipped.

I would love an Apple TV that was price and performance competitive and included some additional functionality, like AirPlay. I just can't see where Apple can do that, however. Samsung are using their own panels and pricing their sets accordingly; by the time Apple assembles the components and puts in some Apple-ness they're obliged to sell a 40" screen for $2,000, which is a non-starter.

Do you think that Apple is getting to the point where it needs an in-house display capability as with processors in the iPad, or at least a capability more directly under their control? Anyone know of investments by Apple in such areas as mems display technologies or other?

Predict it long enough and it may indeed come, just like the iPad took 7 years to get here from when rumors first started in 2002.

That being said, TVs generally have pretty low margins compared to the price of the product, and the margins needed to make a TV worthwhile would skyrocket the price into rich mans land. And TVs are probably one of the most held onto devices in a home.

They already have a connected box strategy and it looks like they are finally paying some real attention to it. I think they should focus their efforts there.

... Let's remember that Apple entered the smartphone and tablet markets because their offerings were disruptive...

... Apple is better off focusing on its core competencies.

With all due respect, I disagree:

1) Apple TV could be selling along with an all-in-one Apple branded TV providing more options and choices to consumers, just like you have the Mac mini and the iMac in the computing space. That would be the ideal way to go. You don't want to buy Apple TV set? You want to keep your Sony? No worry, go with Apple set top box instead.

2) Apple could be as disruptive in the TV business as it has been with smartphones. You do not have to go far. Just make the app store available for Apple TV and you'll see the impact. Games my friend. And I'm not even talking about the integration of TV programs with other apps...

3) Whether Apple like it or not, TV will have to be part of their core competencies because it will include a computer in it. Sure, we're talking about a different experience from when you sit in front of a desktop. But if Apple does not do it right, someone else will. You don't want an HP or a Google to eat your lunch. This is just like the tablet. Before iPad, nobody did it right so it seems so irrelevant as a product. However they kept trying because they knew there was something there. It was not really clear what, but there was something. All-in-one TV is the same. Do it right and you'll at least lead a space if not owning it.

If Apple brings out a TVand I'm not predicting it; I don't think these "analysts" have any idea what they're talking aboutI think it will just be a display you can hang on your wall. The real functionality will be in the iPad they give you along with it. The big screen will merely mirror what's on the iPad through AirPlay.

This will be the logical endpoint of the evolution of TVs for the last 30 years, which have become progressively more and more useless without the remote, which wears out faster and fasterand are glued together now, so you can't even clean the contact pads without breaking them all to Hell.

So the Apple TV will have a $500 remotebut at least it's a remote that can be replaced and updated.

Although Google TV has not quite taken off as much as they would have liked most SoCs ( System on Chips ) in modern connected TVs are moving to an Android OS on the application processor ( ARM A9, MIPS 74K, Intel Atom etc ). This means that all the Android APIs are there for developers and once Google gets a foothold it will be very difficult for anyone else to get into this market. That is if Apple would even want to.

I think Apple will stay with the hockey puck STB design. It is simpler and quicker to develop and due to the low price, consumer do no mind replacing it regularly. Contrast with how long most people hold on to their TV set, definitely much longer that they would a computer or any other item of consumer electronics.

Rather than build an Apple branded TV I think they will simply extend their Airplay technology. Just as you can now buy iPod speaker systems and hifi systems with Airplay support built in, you will be able to buy TVs with Airplay support built in so you wont need a seperate AppleTV. That way they get a royalty for every TV sold.

It was rainy and cold last night, so we had a fire going in the family room.

My daughter and 2 of her 3 kids were gathered 'round the HDTV to watch AI (American Idol).

My daughter and I are great basketball fans (Go Arizona) so we wanted to watch the games also -- sometimes as many as 3 running concurrently.

My daughter said we could do split screen or Picture-In-Picture... but we didn't remember how to do it, the shows and games were starting -- no time to dig out the Sony Bravia manual and/or the AT&T U-verse manual...

TVs are large expensive items, so they tend to have a long purchase cycle as far as electronics go. If you just plunked down 2 or 3 grand on a 50 > inch TV, you aren't going to buy a television from Apple anytime soon. Personally, I think they'd be better off folding the features they mentioned into the Apple TV, or offer a next tier up version that includes them. That way people who already have money sunk into a large flatscreen would be more likely to buy another "living room" product from Apple to go with it, and people who already have the relatively inexpensive current Apple TV would be more likely to replace it with something that costs far less than a smart TV, and could even make use of the AppleTV they already have by moving it to the bedroom, or something.

TVs are a low-margin business, like printers and scanners. Apple licenses bonjour and airplay (and such) to others to support wireless printing/scanning/audio/video. If Apple wanted to be in low-margin, mature, markets they'd still be selling printers and scanners.

Apple probably has built or retrofitted many prototype TVs with airplay circuitry built in.... to test airplay with multiple hardware configurations (different vendors), and this most likely is the origin of the report. This ensures that when LG, Samsung, etc, come out with airplay-compatible TVs it will just work and there will be no bad press from compatibility issues. This does not mean that Apple will be releasing "Apple" TVs.

AppleInsider: Please continue to publish rumors, but please consult a VP of Common Sense so that his/her comments can be included in the article. Thanks.

I have seen the future, and it's my mac mini server. I love that little guy...

Predict it long enough and it may indeed come, just like the iPad took 7 years to get here from when rumors first started in 2002.

That being said, TVs generally have pretty low margins compared to the price of the product, and the margins needed to make a TV worthwhile would skyrocket the price into rich mans land. And TVs are probably one of the most held onto devices in a home.

They already have a connected box strategy and it looks like they are finally paying some real attention to it. I think they should focus their efforts there.

If they do do a TV, they are very likely going to continue to sell the Apple TV box. They are going to say anyone can pick up an Apple TV external box, but if you want the true Apple experience you're going to want Apple's TV. Not to mention it's easy to believe they could make triple the cash-profit on a TV than the little box. It's not about making 35% profit on this TV, it's about making more than the little box and it's about getting the living room. When they pretty much know in advance they will sell millions of something it makes it easier to bring down the price, at least a bit anyway. Obviously the price of this product for Apple is going to be crucial. I'm going to take a stab in the dark and say Steve is not going to introduce this product until he can announce the base-model TV for at most $1 dollar under $1,000.

Sounds like more fallacies to increase the stock price.
Perhaps it is because I am not an analyst but I do not see how an Apple branded TV could see ever the light of day. Seriously, it is getting old.

with airplay now every tv is an apple tv and it costs almost zero (well $4) for manufacturers to add airplay in. I predict that within a year most will. And that airplay will evolve. There's no point for apple putting the circuitry in there when (and that's the genius twist) any ipad/iphone of the future can not only act as a controller but use the tv in any way it sees fit, so in essence you keep the same tv like people do for a no. of years,but you can get new features for it so to speak with an el cheapo new apple tv or your new ipad or iphone.

That's the strategy for apple pretty much, they are not idiots to dilute their brand name in the tv biz, but they are making some great devices to interface with a tv.

I think Apple needs to buy Comcast. The Cisco RNG-100 box and software is worse than Windows 95. It's actually on par with Windows 3. Apple needs to quit dabbling its toes in the water, and get serious about the living room.

Let me get this straight: Apple should buy Comcast (who now owns NBC) for tens of billions of dollars because you don't like the software on your cable box?

Also, windows 3.1 was great. It's Windows 95 that was horrible.

Quote:

Originally Posted by Firefly7475

So are we talking about an actual television here? Like a Cinema Display - but bigger - with an Apple TV built in?

I thought the consensus was that there isn't enough margin in TV's to make it something Apple would do... or is the idea to sell the screen low margin like other TV's and then profit from the extra iTunes movie/TV sales?

Agreed. This rumor doesn't make a lot of sense to me. Steve Jobs has already talked about why Apple isn't getting into this game anytime soon. In fact, the least of the problems is the margin on the hardware. The real issue is the business model the cable industry uses. They are giving away free hardware or renting it on a monthly basis in addition to the television packages. Apple doesn't see a way to make money in this market, which is why the Apple TV is marketed as a gadget/cool toy/hobby. Even building an Apple TV with DVR and all other functions doesn't make sense, because one still needs the cable box. These companies (Comcast, Verizon, etc.) have already invested tens of millions in the infrastructure that maintains and supports the hardware. They're not going to give up that model easily.

Don't get me wrong, I'd love an Apple TV that had blu-ray, DVR and storage. I just don't know that we're going to see it, much less an actual television with all these features.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

Although Google TV has not quite taken off as much as they would have liked most SoCs ( System on Chips ) in modern connected TVs are moving to an Android OS on the application processor ( ARM A9, MIPS 74K, Intel Atom etc ). This means that all the Android APIs are there for developers and once Google gets a foothold it will be very difficult for anyone else to get into this market. That is if Apple would even want to.

Do you have any links to info about Android being in "most modern connected TVs"? That seems surprising to me, since most of the connected TVs I've seen have very rudimentary menu systems and nothing at all that functions like an OS.

They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.

LOL, the 'smart TV' seems to be taking over from the tablet rumours of years gone by. It would make more sense to license Airplay for video.

It would make sense for Apple to do all three things. Licence Airplay. Sell the Apple TV box. And announce the Apple TV - the TV. Also, worth mentioning I think, they will very likely rename the little black box when they bring out the TV itself.

So, like I said... if all Apple do is release a dev kit for the Apple TV (and/or embed it in their own TV) they would no doubt have a successful product, but I don't see it being anywhere near as disruptive as the iPhone was for the smartphone market.

Not unless they do something their competitors aren't already doing...

So are we talking about an actual television here? Like a Cinema Display - but bigger - with an Apple TV built in?

I thought the consensus was that there isn't enough margin in TV's to make it something Apple would do... or is the idea to sell the screen low margin like other TV's and then profit from the extra iTunes movie/TV sales?

My hunch is that Apple would do to TVs what it did to mobile phones: bring out something far better, cooler, and easier than anything ever seen before. And it will be targeted at the high end, at least initially, with nice healthy profit margins built in. They will continue to make their money from selling the hardware but supported by vertically integrated software, services, and inexpensive digital content.

That would be awesome. Just have iTunes built right in without a separate box. Especially if jailbreak allows for clickr. I still don't understand why this space isnt exploding outside the geeky crowd like everything else did.